In This Issue: (click on the links below to access each article)

Regulation / Legislation Update

Department of Education/Internal Revenue Service Skiptracing Service for the Federal Perkins Loan Program Unavailable Until Further Notice
The Department of Education has posted a notice that the skiptracing services it operates in conjunction with the Internal Revenue Service for the Perkins Loan Program will be unavailable until further notice. The shutdown is due to the end of the agreement between the two agencies. The Department’s notice indicates that it is attempting it renew the agreement and ensure the security of the system.

The complete notice is available here: http://ifap.ed.gov/eannouncements/0915IRSSkiptrace.html.

Default Prevention and Management announce the posting of a revised Cohort Default Rate Guide
Federal Student Aid is pleased to announce the issuance of the August 2006 Cohort Default Rate Guide. This version of the Guide captures the changes made since its initial publication on August 2001, including those changes noted on Default Prevention & Management's web page under the Default Rate Guide "change page information" link. Changes resulting from the Higher Education Reconciliation Act of 2005 (the HERA) have also been incorporated into this Guide issue. Tables and examples have been updated and some areas of information have been restructured for easier reading.

As before, the Guide is the primary reference tool for schools to use in understanding the complete cohort default rate process-from the calculation through the challenge/appeal processes. The Guide is effective until the Department withdraws it, changes it or publishes other guidance. The information found in the Guide does not supersede or alter any regulations or statutes requirements that are in effect. If information in the Guide conflicts with the regulations and statutes, the regulations and/or statutes take precedence.

Like the previous version of the Guide, the Guide's material is organized into four parts. Each part is further divided into chapters: Part I, Introduction; Part II General Information; Part III Strategy and Part IV Challenges, Adjustments and Appeals. The Guide has a Glossary to help the reader locate specific topics.

Details and the complete guide can be found here: http://ifap.ed.gov/DefaultManagement/finalcdrg.html.

FY 2004 Official Cohort Default Rates Distributed on 9/11/06
On the morning of Monday, September 11, 2006, the Department distributed the FY 2004 official cohort default rate notification packages.

For domestic schools enrolled in the Electronic Cohort Default Rate (eCDR) process, delivery was made to the Student Aid Internet Gateway (SAIG) destination point designated by the school. Each eCDR package contained a cover letter, a reader-friendly loan record detail report, and an extract-type loan record detail report.

Domestic schools not enrolled in eCDR will not receive notification packages from the Department but may download their cohort default rates and accompanying Loan Record Detail Reports at https://www.nsldsfap.ed.gov. The Department strongly encourages schools not already signed up for eCDR to complete the enrollment form available at http://www.fsawebenroll.ed.gov. All domestic schools were required to sign up for eCDR by June 1, 2003.

All foreign schools will continue to receive hard copy notification packages.

Any school that did not have a borrower in repayment, during the current nor any of the past cohort default rate periods, will not receive a FY 2004 official cohort default rate notification package. These schools are considered to have no cohort default rate data and no cohort default rate.

Complete details can be found here: http://ifap.ed.gov/eannouncements/0911FY04OfficalCDRates.html.

Dear Colleague: 2006-2007 Supplemental Campus-Based Awards
This Dear Colleague letter provides information about supplemental campus-based awards for the 2006-2007 Award Year, and was posted on 09-05-2006.

Each year prior to September 30th, we use information collected on the Campus-Based Reallocation Form (ED Form E40-4P) to reallocate unexpended Federal Supplemental Educational Opportunity Grant (FSEOG), Federal Work-Study (FWS), and Federal Perkins Loan (Perkins Loan) program funds from the previous award year as supplemental allocations for the current award year. Accordingly, later this month we will distribute the supplemental campus-based awards for the 2006-2007 Award Year to schools that meet the required conditions for receipt of such funds. Because there were no new Perkins Loan funds appropriated for the 2005-2006 Award Year, there are no Perkins Loan funds available to be awarded through the supplemental award process.

The questions and answers that follow explain how the 2006-2007 supplemental award funds for each campus-based program will be distributed and how schools will be notified of the supplemental awards.

The complete Q & A can be found here: http://www.ifap.ed.gov/dpcletters/CB0613.html.

Second Pell Grant Administrative Cost Allowance Payments for 2005-2006 Award Year
The Federal Pell Grant (Pell Grant) regulations at 34 CFR 690.10 provide for an Administrative Cost Allowance (ACA) payment of $5.00 to each participating school for each student who receives a Pell Grant at that school for an award year. These funds may be used only to defray the costs of administering the Pell Grant, Federal Supplemental Educational Opportunity Grant, Federal Work-Study, and Federal Perkins Loan programs.

ACA payment amounts are not included in a school's Current Funding Level (CFL) but are direct payments made to a school based on its unduplicated student recipient information. A school's total number of Pell Grant unduplicated recipients, used in the calculation of the ACA payment, includes students with at least one reported accepted actual disbursement (DRI = true) in the Common Origination and Disbursement (COD) System. A student will be included in the calculation even if there is a full recovery of the entire Pell Grant award.

A school's total unduplicated recipient count excludes students:
-Who have been determined ineligible for a Pell Grant or rejected by the Central Processing System;
-For whom origination records were accepted in the COD System but for whom accepted actual disbursements (DRI = true) have not been received; or
-For whom all actual disbursements have been rejected.

The second ACA payment for the 2005-2006 Award Year is based on records that the COD System has processed from the date we processed the first ACA payments for the 2005-2006 Award Year (March 18, 2006) up to the date that we process the second ACA payments for the 2005-2006 Award Year. We began processing the second ACA payments for all schools on August 19, 2006. Schools will begin to see these payments deposited directly into their bank accounts over the next few weeks.

The Department of Education's Grant Administration and Payment System (GAPS) forwards ACA payments electronically through the Federal Reserve Bank of Richmond, VA into schools' bank accounts. If a school has not initiated a direct deposit form (Standard Form 1199A) to establish a unique bank account for ACA payments, the GAPS will automatically deposit these funds into the school's existing account. Schools do not need to acknowledge receipt of ACA payments. However, we ask that schools forward a copy of this announcement to their Business offices for inclusion in 2005-2006 Award Year records.

ACA payment amount notifications will be sent to reporting schools. Specifically, we will send an Electronic Statement of Account (ESOA) (Message Class PGAS06OP) that reflects the ACA payment amount to the reporting school's Student Aid Internet Gateway (SAIG) mailbox. Additionally, an ACA payment amount will be displayed on the School Funding Information screen on the COD Website.

Complete details can be found here: http://ifap.ed.gov/eannouncements/0821SecondACAPayment0506.html.